EU urges green steel to be available in limited quantities as a fix for auto emissions
Buy expensive steel that is made using a new technology powered by green hydrogen, which barely exists? Under European Union plans, 'Europe's' automakers are facing this prospect, who are already under pressure due to the intensifying competition from 'China', as the bloc aims to boost its'steel' industry while still meeting environmental targets. The EU has changed its CO2 emission targets for new cars to 90% by 2035, from 100% earlier. This is a shift from the previous 100% target.
EU WANT TO BOOST EUROPEAN STEAM SECTOR The new proposal is tied to the EU Industrial Accelerator Act, due to be introduced on March 4. Automakers, who account for a five percent of Europe's demand for steel, must compensate the remainder 10% by using low-carbon steels and alternative fuels. What's the catch? The catch? According to Stegra, a pure-play green product is expected to be about a third higher in price than conventional steel when it becomes available. Steelmakers such as ArcelorMittal, Salzgitter and others are turning to scrap for production when faced with this economic reality. Thyssenkrupp is renegotiating its subsidy terms with Brussels. The Leadership Group for Industry Transition, a group of governments and multinational companies, reported that the annual green steel production capacity was expected to reach 28 million tons in 2050. However, calculations show that only a third is currently under construction. Around 18 million tonnes of the planned capacity will be in Europe. Last month, ArcelorMittal's CFO GenuinoChristino said that "we don't have hydrogen readily available. At least not at the scale required."
The German auto lobby has criticised EU's plan.
Hildegard Müller, VDA President in December, said: "Our industry is now dependent once again on developments that it cannot influence."
Nearly a dozen experts and executives from the steel and automotive industries said they expected Brussels would introduce policies that encourage demand and create a market for low emission steel. The majority of people expect only limited details in the initial proposal and key elements to be delayed.
Chris Heron is the secretary general of E-Mobility Europe. He said that there was confusion among a lot people about the Commission's proposals. They were trying to figure out what would be realistic and how the market might look. DEFINITION "WILD -WEST" Another problem is the lack of a consensus on what constitutes green steel, or low carbon steel. A steel executive described the current market as "wild west". The study found that companies use a variety of terms, metrics, and thresholds when marketing their lower-emission product.
The switch from coal-based blast-furnaces to hydrogen-based direct-reduced iron (DRI), and electric-arc furnaces, requires billions of euro in investments. Instead, many steelmakers are focusing on a cautious, step-bystep strategy centered on electric arcs furnaces that can run initially on scrap before switching to hydrogen-based DRI. EAFs that are fed by scrap emit less carbon dioxide than blast furnaces. However, many players in the industry say they can't be a long-term solution due to a lack of high-quality waste.
Automobile manufacturers are also adapting.
Volvo Car has agreed to use scrap-based fossil free steel to begin with, and then switch to hydrogen-based supplies once production is established.
Christian Levin said, "We think there will be demand," Traton Scania CEO Christian Levin. "But we have not offered it commercially yet, and we do not buy it yet because it's not available."
(source: Reuters)
